Retirement Plans (Tables)

12 Months Ended

Dec. 31, 2019

Defined Benefit Pension Plans

Defined Benefit Pension and Postretirement Benefit Plan Assets and Obligations

The December 31 balances of these defined benefit pension plans assets and obligations are shown below:

	2019						2018
	United States			Foreign			United States			Foreign
	(in thousands)
Assets and Obligations
Change in benefit obligation:
Projected benefit obligation:
Beginning of year	$	178,237		$	39,146		$	363,026		$	39,353
Service cost		1,608			751			2,196			786
Interest cost		7,189			691			8,940			687
Actuarial loss (gain)		24,447			4,520			(30,136	)		773
Benefits paid		(7,690	)		(836	)		(14,793	)		(741	)
Retiree annuity purchase		—			—			(151,341	)		—
Liability loss due to settlement		—			—			345			—
Non-U.S. currency movement		—			(320	)		—			(1,712	)
End of year		203,791			43,952			178,237			39,146
Change in plan assets:
Fair value of plan assets:
Beginning of year		144,301			1,400			324,506			1,307
Company contributions		2,805			923			2,587			822
Actual return on plan assets		27,516			64			(16,658	)		50
Benefits paid		(7,690	)		(836	)		(14,793	)		(741	)
Retiree annuity purchase		—			—			(151,341	)		—
Non-U.S. currency movement		—			35			—			(38	)
End of year		166,932			1,586			144,301			1,400
Funded status	$	(36,859	)	$	(42,366	)	$	(33,936	)	$	(37,746	)

Amounts Recorded within Statement of Financial Position

The following table provides amounts recorded within the account line items of the statements of financial position as of December 31:

	2019						2018
	United States			Foreign			United States			Foreign
	(in thousands)
Retirement plans assets	$	18,457		$	—		$	16,883		$	—
Accrued employees’ compensation and withholdings		(2,826	)		(922	)		(2,676	)		(852	)
Retirement plans liabilities		(52,490	)		(41,444	)		(48,143	)		(36,894	)
Funded status	$	(36,859	)	$	(42,366	)	$	(33,936	)	$	(37,746	)

Amounts Recognized in Accumulated Other Comprehensive Income

The following table provides amounts recognized in accumulated other comprehensive income as of December 31:

	2019				2018
	United States		Foreign		United States		Foreign
	(in thousands)
Deferred taxes related to prior service cost recognized in other comprehensive income	$	560	$	—	$	560	$	—

Pension Plans with Accumulated Benefit Obligation and Projected Benefit Obligation in Excess of Plan Assets

Information for pension plans with an accumulated benefit obligation in excess of plan assets as of December 31:

	2019				2018
	United States		Foreign		United States		Foreign
	(in millions)
Projected benefit obligation	$	55.3	$	44.0	$	50.8	$	39.1
Accumulated benefit obligation		53.2		39.9		48.6		35.6
Fair value of plan assets		—		1.6		—		1.4

Net Periodic Pension and Postretirement Benefit Costs

For the years ended December 31, 2019, 2018, and 2017, Teradyne’s net periodic pension cost (income) was comprised of the following:

	2019						2018						2017
	United States			Foreign			United States			Foreign			United States			Foreign
	(in thousands)
Components of Net Periodic Pension Cost (Income):
Service cost	$	1,608		$	751		$	2,196		$	786		$	2,239		$	818
Interest cost		7,189			691			8,940			687			13,151			852
Expected return on plan assets		(6,042	)		(29	)		(9,049	)		(19	)		(12,008	)		(165	)
Amortization of prior service cost		—			—			58			—			70			—
Net actuarial loss (gain)		2,973			4,485			(4,429	)		743			(6,712	)		(310	)
Settlement loss		—			—			345			—			—			—
Total net periodic pension cost (income)	$	5,728		$	5,898		$	(1,939	)	$	2,197		$	(3,260	)	$	1,195
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:
Reversal of amortization items:
Prior service cost		—			—			(58	)		—			(70	)		—
Total recognized in other comprehensive income		—			—			(58	)		—			(70	)		—
Total recognized in net periodic pension cost (income) and other comprehensive income	$	5,728		$	5,898		$	(1,997	)	$	2,197		$	(3,330	)	$	1,195

Weighted Average Assumptions to Determine Net Periodic Cost and Benefit Obligation

Weighted Average Assumptions to Determine Net Periodic Pension Cost at January 1:

	2019						2018						2017
	United States			Foreign			United States			Foreign			United States			Foreign
Discount rate		4.1	%		1.8	%		3.4	%		1.8	%		3.9	%		1.8	%
Expected return on plan assets		4.3			2.0			4.3			1.5			4.0			2.0
Salary progression rate		2.5			2.5			2.3			2.7			2.6			2.7

Weighted Average Assumptions to Determine Pension Obligations at December 31:

	2019						2018
	United States			Foreign			United States			Foreign
Discount rate		3.0	%		1.1	%		4.1	%		1.8	%
Salary progression rate		2.6			2.5			2.5			2.6

Weighted Average Pension Asset Allocations by Category

The following table provides weighted average pension asset allocation by asset category at December 31, 2019 and 2018:

	2019						2018
	United States			Foreign			United States			Foreign
Fixed income securities		94.0	%		—	%		94.0	%		—	%
Equity securities		5.0			—			5.0			—
Other		1.0			100.0			1.0			100.0
		100.0	%		100.0	%		100.0	%		100.0	%

Target Asset Allocation and Index for Each Asset Category

The target asset allocation and the index for each asset category for the U.S. Plan, per the investment policy, are as follows:

Asset Category:	Policy Index:	Target Allocation
U.S. corporate fixed income	Barclays U.S. Corporate A or Better Index		75	%
Global equity	MSCI World Minimum Volatility Index		5
U.S. government fixed income	Barclays U.S. Long Government Bond Index		14
High yield fixed income	Barclays U.S. High Yield Index		5
Cash	Citigroup Three Month U.S. Treasury Bill Index		1

Changes in Fair Value of Pension Assets

The fair value of pension plan assets by asset category and by level at December 31, 2019 and December 31, 2018 were as follows:

	December 31, 2019
	United States								Foreign
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Fixed income securities:
Corporate debt securities	$	—	$	133,792	$	—	$	133,792	$	—	$	—	$	—	$	—
U.S. government securities		—		23,186		—		23,186		—		—		—		—
Global equity		—		8,344		—		8,344		—		—		—		—
Other		—		—		—		—		—		1,586		—		1,586
Cash and cash equivalents		1,610		—		—		1,610		—		—		—		—
Total	$	1,610	$	165,322	$	—	$	166,932	$	—	$	1,586	$	—	$	1,586

	December 31, 2018
	United States								Foreign
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Fixed income securities:
Corporate debt securities	$	—	$	115,424	$	—	$	115,424	$	—	$	—	$	—	$	—
U.S. government securities		—		20,176		—		20,176		—		—		—		—
Global equity		—		7,252		—		7,252		—		—		—		—
Other		—		—		—		—		—		1,400		—		1,400
Cash and cash equivalents		1,449		—		—		1,449		—		—		—		—
Total	$	1,449	$	142,852	$	—	$	144,301	$	—	$	1,400	$	—	$	1,400

Expected Future Benefit Payments

Future benefit payments are expected to be paid as follows:

	United States		Foreign
	(in thousands)
2020	$	8,027	$	1,237
2021		8,416		985
2022		9,163		982
2023		9,785		1,258
2024		10,558		1,098
2025-2029		59,665		6,129

Group Annuity Insurance Contracts

Changes in Fair Value of Pension Assets

Changes in the fair value of Level 3 group annuity insurance contracts for the year ended December 31, 2018 were as follows:

	Group Annuity Insurance Contracts
	(in thousands)
Balance at December 31, 2017	$	3,166
Transfer out of level 3		(2,658	)
Purchases of retiree annuity insurance contracts		(512	)
Interest and market value adjustments		59
Benefits paid		(40	)
Other		(15	)
Balance at December 31, 2018	$	—

Postretirement Benefit Plans

Defined Benefit Pension and Postretirement Benefit Plan Assets and Obligations

The December 31 balances of the postretirement assets and obligations are shown below:

	2019			2018
	(in thousands)
Assets and Obligations
Change in benefit obligation:
Projected benefit obligation:
Beginning of year	$	9,256		$	6,177
Service cost		41			39
Interest cost		347			196
Actuarial loss		717			25
Benefits paid		(1,358	)		(889	)
Special termination benefits		—			3,708
End of year		9,003			9,256
Change in plan assets:
Fair value of plan assets:
Beginning of year		—			—
Company contributions		1,358			889
Benefits paid		(1,358	)		(889	)
End of year		—			—
Funded status	$	(9,003	)	$	(9,256	)

Amounts Recorded within Statement of Financial Position

The following table provides amounts recorded within the account line items of financial position as of December 31:

	2019			2018
	(in thousands)
Accrued employees’ compensation and withholdings	$	(1,231	)	$	(1,310	)
Retirement plans liability		(7,772	)		(7,946	)
Funded status	$	(9,003	)	$	(9,256	)

Amounts Recognized in Accumulated Other Comprehensive Income

The following table provides amounts recognized in accumulated other comprehensive income as of December 31:

	2019			2018
	(in thousands)
Prior service credit, before tax	$	(58	)	$	(249	)
Deferred taxes		(1,684	)		(1,641	)
Total recognized in other comprehensive income, net of tax	$	(1,742	)	$	(1,890	)

Net Periodic Pension and Postretirement Benefit Costs

For the years ended December 31, 2019, 2018, and 2017, Teradyne’s net periodic postretirement benefit cost (income) was comprised of the following:

	2019			2018			2017
	(in thousands)
Components of Net Periodic Postretirement Benefit Cost (income):
Service cost	$	41		$	39		$	34
Interest cost		347			196			201
Amortization of prior service credit		(191	)		(373	)		(496	)
Net actuarial loss		717			25			398
Special termination benefits		—			3,708			591
Total net periodic postretirement benefit cost		914			3,595			728
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:
Prior service cost		—			—			—
Reversal of amortization items:
Prior service credit		191			373			496
Total recognized in other comprehensive income		191			373			496
Total recognized in net periodic postretirement cost and other comprehensive income	$	1,105		$	3,968		$	1,224

Weighted Average Assumptions to Determine Net Periodic Cost and Benefit Obligation

Weighted Average Assumptions to Determine Net Periodic Postretirement Benefit Income as of January 1:

	2019			2018			2017
Discount rate		4.0	%		3.4	%		3.9	%
Initial health care cost trend rate		7.5			7.9			7.3
Ultimate health care cost trend rate		4.5			4.5			5.0
Year in which ultimate health care cost trend rate is reached		2026			2026			2023

Weighted Average Assumptions to Determine Postretirement Benefit Obligation as of December 31:

	2019			2018			2017
Discount rate		3.0	%		4.0	%		3.4	%
Initial medical trend		7.1			7.5			7.9
Ultimate health care trend		4.5			4.5			4.5
Medical cost trend rate decrease to ultimate rate in year		2026			2026			2026

Expected Future Benefit Payments

Future benefit payments are expected to be paid as follows:

	Benefit Payments
	(in thousands)
2020	$	1,231
2021		1,171
2022		958
2023		789
2024		662
2025-2029		1,965

One Percentage Point Change in Assumed Health Care Cost Trend Rates for Year

A one percentage point change in the assumed health care cost trend rates for the year ended December 31, 2019 would have the following effects:

	1 Percentage Point Increase		1 Percentage Point Decrease
	(in thousands)
Effect on total service and interest cost components	$	6	$	(6	)
Effect on postretirement benefit obligations		139		(133	)